EBay Q4 falls short on sales of $2.6B, EPS in line at $0.59, full year revenues of $9.6B


EBay reported its Q4 and full-year earnings after market close today, where it reported sales of $2.6 billion and adjusted earnings per share of $0.59 for the quarter (versus $0.54 a year ago), and $9.6 billion in revenues for the year. While the holiday season, which fell into the quarter that ended December 31, is traditionally a huge time for e-commerce companies, in the case of this e-commerce giant, it fell short: analysts were expecting sales of $2.61 billion and earnings per share of 59 cents.

Still, the company tried to sound an upbeat tone pointing to active buyer growth of five percent to 170 million. Gross Merchandise Volume, or the total amount spent on its platform, was $24.425 billion versus $22.275 billion for the same quarter a year ago.

“Q4 was a record quarter for eBay, representing the fifth quarter in a row of volume acceleration in our US Marketplace,” said Devin Wenig, President and CEO of eBay Inc. “We have made great progress transforming eBay while delivering meaningful growth and we expect further acceleration in 2018 as we continue to execute our strategy.”

The earnings come on the heels of a lacklustre Q3 for eBay, where sales of $2.4 billion and EPS $0.48 fell well within analyst estimates but didn’t underscore any dramatic growth for the company, which added 2 million customers in that quarter.

It’s interesting to compare eBay to Amazon. Once a stablemate and potential rival of eBay’s in first wave of large e-commerce hits, Amazon has gone on to diversify massively into a multi-service loyalty program, artificial intelligence and gadgets to make AI a part of everyone’s home life, original content, cloud services targeting enterprises and other businesses, and more.

eBay’s biggest and most successful expansion beyond its core auction business and marketplace was probably acquiring PayPal, which it later divested and, as you can see from its earnings earlier today, is now bigger than the company that once owned it. Even in its core business of selling goods online, some have described it as eBay struggling for relevancy as consumer and sellers in categories like fashion have moved beyond its own efforts.

More to come.

WhatsApp hits 1.5 billion monthly users. $19B? Not so bad.


Facebook’s $19 billion acquisition of WhatsApp sounds smarter and smarter. Today CEO Mark Zuckerberg announced that WhatsApp now has 1.5 billion users and sees 60 billion messages sent per day. That’s compared to 1.3 billion users in August.

We’ll have more info soon

Shutterfly stock hits all-time high after snapping up the leader in kids’ class photos


One day after announcing strong earnings and the massive strategic acquisition of the leader in yearbook and school photos, Shutterfly is watching its shares soar.

It’s quite a turn for a company that just over a year ago was staring at a massive new market competitor in Amazon, whose entry into the personalized photo sharing market caused Shutterfly’s stock to tumble.

By buying Lifetouch for $825 million, Shutterfly not only gets the leading photo service for those adorably cute (or horrifyingly cute) school pictures that only a parent can love, it gets an opportunity to sell more crap that can now be customized with the faces of a parent’s darling little angel (or angels).

Lifetouch is responsible for taking the pictures of over 25 million children a year during school picture time at the beginning of the year.

“It brings together two uniquely complementary assets, gives Shutterfly access to more than 10 million highly desirable households, and as a result, we expect to almost double our adjusted EBITDA by 2020,” said Shutterfly chief executive Christopher North, on yesterday’s earnings call.

On the strength of that deal, Shutterfly’s stock is buzzing. Its shares are on a victory lap run, rising $14.83 per share (or over 28%) in today’s trading to close at an all-time high.

The acquisition wasn’t the only bit of good news for Shutterfly or its shareholders. The company also blew past the earnings targets analysts had set for the company. Analysts had estimated earnings per share of roughly $2.88 and Shutterfly clocked in with $3.11 earnings per share.

“We had a very successful fourth quarter with net revenues of $593.8 million, with strong performance in both consumer and SBS,” North said yesterday. “We also performed well on adjusted EBITDA, with the fourth quarter coming in at $215.6 million.”

The Lifetouch acquisition should also help smooth lumpy revenues for the company extending its highest trafficked months to another season with the addition of a massive business in fall portraiture.

Just look at Lifetouch’s numbers. The company posted nearly $1billion in sales for the year ended June 30, according to Lifetouch. Shutterfly said that it expects the new business to generate $450 million of adjusted earnings before interest, taxes, depreciation, and amortization by 2020.

“In 2018, we will accelerate the pace at which we expand the range of products we offer. I’m excited to share that we will be launching two new categories this year, kids and pets, clearly a natural fit for our customer base,” North said on the earnings call. “Both new categories will launch in the third quarter and we will provide more details closer to the launch date. We’ll also continue to add to the personalized gifts and home décor range. Overall we will be doubling the number of new products launched in 2018 versus 2017.”

Tech We’re Using: A ‘Gadget Junkie,’ Wearing His Tech and Covering Deals

I sometimes use a service called Relationship Science, which is a fascinating way to understand the connections between the people I cover. Think Six Degrees of Kevin Bacon, or in this case, Six Degrees of Jamie Dimon.

Despite being an unabashed Apple aficionado — I also have an Apple Watch — I happen to use Google apps for much of my life since it’s so easy to collaborate on documents with colleagues and coordinate calendars. (And yes, Google Maps is still better than Apple Maps.) I use Slack to communicate with everyone at work, especially when I’m traveling and not in the office.

I’m on airplanes too much, so I’m also a devotee of Bose noise-canceling headphones. Other key pieces of travel technology: Hearos Xtreme earplugs for overnight flights are the best on the market (trust me, I’ve tried them all); if you need to block out light to sleep on a flight or you’re stuck in a hotel room that has terrible shades, get yourself a Lonfrote sleep mask, which is so much better than the freebie on your flight. I carry a handful of extra portable power packs to charge devices on the road. And I always keep a stash of RxBars (blueberry, pumpkin or peanut) with me; they're about as healthy as you can get when it comes to packaged and packable food.

What could be better?

I still want a bigger, longer lasting battery on the iPhone. I can never get enough battery life — and I have battery anxiety looking at the percentage icon dwindle throughout the day if I haven’t found a place to plug in. Same for the AirPods, though I’ve found that’s less of an issue for me.

On my Apple Watch, I desperately want to be able to adjust the sensitivity that activates the screen when I turn my wrist to look at it. (Hey, Apple Watch team: I’d make it a bit more sensitive so it turns on more frequently, even at the cost of battery life.)

In your years of writing about deals, which tech merger do you think has had the most significant impact on people’s lives?

Google’s acquisition of YouTube in 2006 was game changing. It was the single biggest accelerant of the use of video online. It's probably the most underappreciated deal of all time in any industry. The price tag was $1.65 billion and YouTube was losing money at the time, so it seemed crazy for Google. But today, the deal looks like a brilliant heist.

You also appear on CNBC’s “Squawk Box.” How has technology changed live broadcasting and your experience as an anchor?

Photo

Mr. Sorkin called Google’s acquisition of YouTube in 2006 “game changing.” “It’s probably the most underappreciated deal of all time in any industry,” he said. Credit Mike Cohen for The New York Times

It has probably changed the most on the production side of TV. It used to be that you needed a truck and satellite hookup wherever you’d go. We’d travel with an army of production and technical personnel. But these days you can use services like LiveU, which basically puts an entire satellite truck in a shoe box that connects to the internet or wirelessly using cellular towers. I was just in China and Saudi Arabia, and we broadcast entire three-hour live shows with only a handful of people and no satellite connection.

What tech product are you currently obsessed with using in your daily life?

Sonos is pretty great. We have a handful of Sonos speakers in our home for music and TV. We also have an Echo and Google Home speaker. I’m thinking about getting the Sonos One, which is supposed to incorporate Alexa, Google Assistant and ultimately access to Apple all in one device.

I read magazines on an app I love called Texture; it’s like Netflix for magazines. If you’re a magazine junkie, it is so worth it.

I’m into sleep trackers like Autosleep on the Apple Watch, but I want to find a device that tracks sleep without wearing anything on my wrist or body. (Or keeping a phone in bed, which I refuse to do.) I also use Nokia’s Withings wireless scale, which is a pretty good way to keep you honest about food consumption — and much easier than constantly entering what you eat in MyFitnessPal or LoseIt, though I’ve used both and they're good. And I have a Braun Series 7 electric razor that for years I’ve told every male friend is the best thing I use daily, though Braun came out with a new one last year so I don’t know if I’m right about that anymore.

Apple has more than $250 billion in cash. Which companies do you think it should buy, and why?

I used to think they should make a big deal, but these days I’m less certain. The next big thing in computing is clearly going to be artificial intelligence and health care. I imagine I’d be investing in those spaces aggressively — but the potential takeover targets are less obvious.

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Twitter now says 1.4 million people interacted with Russian trolls during 2016 presidential campaign


Twitter has now updated the number of people engaging with Russian trolls during the 2016 presidential campaign to 1.4 million. That’s more than double the initial 677,775 Twitter originally said had seen, followed or retweeted one of these accounts earlier this month.

The new number reflects those who may have also replied to or @ mentioned these accounts.

“We have expanded the number of people notified about interactions with Twitter accounts potentially connected to a propaganda effort by a Russian government-linked organization known as the Internet Research Agency,” Twitter said in the update. “Our goal in providing these notifications is to advance public awareness of and engagement with the important issues raised in our blog post, and provide greater transparency to our account holders and the public.”

Twitter also said it would only notify these people of certain interactions but that it would not be notifying everyone who ever saw one of these accounts on its platform.

However, Twitter also noted it may notify more people in the future. “As our review continues, we may also email additional users,” Twitter said. “If and when we do so, we will do our best to keep the public updated.”

The total number of Russian-linked troll accounts, as we reported earlier in January, is over 50,000, of which 3,800 were thought to be from the Internet Research Agency (IRA).

The IRA is a Russian company with Kremlin ties that has been exposed as organizing purposeful disinformation campaigns in the U.S. and elsewhere — including attempting to influence the 2016 presidential election.

The news furthers the perception that social media platforms like Twitter and Facebook, which has acknowledged its own Russian troll army problems during the election, are not making enough of an effort to shutter disinformation campaigns that have contributed to swaying the voting public.

Further — and despite a promise of more transparency — the notification seems to have added to the confusion. Ars Technica’s Cyrus Farivar, who was sent one of the notification emails lamented that Twitter didn’t name names. “What exactly am I supposed to do with this email?,” Farivar asked.

Here’s the full update from Twitter’s blog:

Updated on January 31, 2018

We have expanded the number of people notified about interactions with Twitter accounts potentially connected to a propaganda effort by a Russian government-linked organization known as the Internet Research Agency. Our notice efforts are focused on certain types of interactions, and they will not encompass every person that ever saw this content. Our goal in providing these notifications is to advance public awareness of and engagement with the important issues raised in our blog post, and provide greater transparency to our account holders and the public.

We have now sent notices to Twitter users with an active email address who our records indicate are based in the US and fall into at least one of the following categories:

  • People who directly engaged during the election period with the 3,814 IRA-linked accounts we identified, either by Retweeting, quoting, replying to, mentioning, or liking those accounts or content created by those accounts;
  • People who were actively following one of the identified IRA-linked accounts at the time those accounts were suspended; and
  • People who opt out of receiving most email updates from Twitter and would not have received our initial notice based on their email settings.

Approximately 1.4 million people have now received a notification from Twitter. We will be sending a short survey to a small group of people who received our notification to gain feedback on this process. As our review continues, we may also email additional users. If and when we do so, we will do our best to keep the public updated.

SpaceX successfully launches GovSat-1 on a flight proven Falcon 9


SpaceX has launched a Falcon 9 rocket loaded with a geocommunications satellite commissioned by the Government of Luxembourg. The satellite, created by Orbital STK and to be operated by SES, will support humanitarian and military operations for Luxembourg, among other communications functions.

The rocket took off from Cape Canaveral on Wednesday, a day after its initial planned launch. The original window wasn’t viable due to weather, but the rocket launched as planned at the opening of its backup date with favorable weather conditions today.

SpaceX is also readying its Falcon Heavy for launch from Cape Canaveral, with a planned launch date of February 6. That’ll be a huge milestone for the company, regardless of whether the Heavy makes it all the way to orbit on its first try or not.

This launch today didn’t include a recovery attempt of the Falcon 9 first stage booster used during the launch. The booster used was a reflown rocket, however, having been used May last year during a mission for a different client.

PayPal sees 24% revenue growth in its latest quarter


PayPal impressed Wall Street when it reported fourth-quarter earnings after the bell on Wednesday. The global payments giant beat analyst expectations for both sales and profit.

PayPal reported $3.71 billion in revenue on a foreign-exchange neutral basis, or 24% growth from the same period last year. Analysts were expecting $3.63 billion in revenue for the quarter.

Adjusted earnings per share were 55 cents, compared to the 52 cents that Wall Street forecast.

The company processed $131 in total payments volume for the fourth quarter, showcasing 32% growth.

PayPal has grown to 227 million active customer accounts, after adding 8.7 million for the quarter.

PayPal separated from eBay in 2015 and is currently the larger of the two companies, with a market cap of $103 billion. eBay is valued at $42 billion.

The two companies agreed to extend their partnership through July 2023, making PayPal the default payment option for eBay.